Some Peco commercial customers will now pay for power by the hour

Now that nearly all Peco Energy Co. customers have smart meters, more than a thousand commercial and industrial clients will be switched to hourly pricing on June 1, a potentially disruptive change in billing.

The new pricing will affect medium-size commercial customers that do not shop for power from competitive suppliers. Rather than paying a flat per-kilowatt-hour charge, their price will now fluctuate hourly, depending on spot wholesale-market prices.

The groundwork for the switch was set by Peco's installation of 1.7 million-plus smart meters, which allow it to measure usage at 15-minute intervals.

The switch could mean higher or lower bills for customers, depending on their load patterns. Customers that use power during off-peak times (nights and weekends) may benefit. But hourly prices can also spike dramatically during extreme weather events or peak demand periods.

In a series of communications with customers, Peco has encouraged those that want fixed prices to explore signing up with competitive suppliers.

"Hourly pricing may not be right for everyone, which is why there are so many different choices out there for customers," said Ben Armstrong, a Peco spokesman. The change affects customers whose peak demand ranges between 100 and 500 kilowatts. A typical medium commercial monthly bill runs from $16,000 to $22,000, he said.

Most of Peco's 6,500 medium-size commercial customers have switched to competitive suppliers, the utility says. But the prospective change has created anxiety among some of the 1,170 customers that have not.

Andrew Rudin, project coordinator for the Interfaith Coalition on Energy in Melrose Park, said many religious congregations he advises had bad experiences buying power from competitive suppliers.

"For us, buying power from third-party suppliers has been a horrible experience," Rudin said. "The money comes right out of the collection plate."

The pricing change was set in motion in December 2014, when the Pennsylvania Public Utility Commission approved Peco's default-service plan. That plan sets forth how the utility will supply customers that don't shop, which includes most small business and residential customers.

The plan, intensely litigated, required Peco to stop buying power in long-term contracts on June 1 for medium-size commercial customers.

215-854-2947 @maykuth